All visible signs of the grandiose megadevelopment known as Cataloochee Wilderness Resorts have vanished from public view in Haywood County.

Businessmen behind the development recently vacated a Clyde office that served as their headquarters owing more than $8,000 in back rent, according to a civil lawsuit filed against them by the landlord. The water to the office was turned off for failure to pay their bill, according to Clyde town records. Boxes of files — from credit card statements to printed out emails to property blueprints — were left behind when they moved out.

Cataloochee Wilderness Resorts burst onto the front pages of local newspapers three years ago, garnering attention both for its massive scale and unconventional approach — as well as a controversial figure behind the project.

The plans called for a 4,500-acre development in Jonathan Creek with shopping malls, condos, a hotel, a movie theater, snow skiing and even water skiing, as well as hundreds of homes.

Six years into the project, however, the developers do not own a single acre of land. They have not secured financing for the project. Nor have they sealed lease agreements from retailers to fill the massive outlet complex featured in the plans.

That doesn’t mean the project is off, however, according to Frank Wood, spokesman for the project.

“It is still percolating,” Wood said. “We just aren’t ready to say anything right now. We are in final negotiations.”

The project has been stalled in the financing stage for some time. Wood said most recently the economy has posed a challenge.

“It is difficult getting financing right now,” Wood said.

But the former president of the land acquisition corporation behind the project said the economy is not to blame.

“I don’t think the economy had a doggone thing to do with it. This thing was sliding down already,” said Steve Lusk, who spent two years working for the project.

Lusk served as a property procurement agent, tracking down the owners of key parcels that the developers hoped to buy.

“I was the one getting the manure under the boots,” Lusk said.

Jonathan Creek is a rural community with a plethora of small farms. Lusk knocked on door after door, visiting on people’s porches, around their kitchen tables or in the shade of their barns.

“They are wonderful people out there, whether they were with us or against us,” Lusk said.

Lusk hung out with farmers and watched cattle being born. He was invited to Thanksgiving dinner by one family. And just last month, he went to the funeral of one person he’d grown close to during his work.

Lusk said money never actually changed hands in any of the contracts he secured. The contracts merely locked in a price that the landowner was willing to sell for.

Usually, the buyer puts up a good faith deposit to show they are serious when entering such contracts. But Cataloochee developers kept the deposit in an escrow account held by their own agent rather than with the landowner, Lusk said.

The contract terms were “extremely protective” of Cataloochee developers. Lusk said the contract language went to extreme lengths to envision scenarios that would allow the developers to walk away and not purchase the land after all.

Lusk said all the contracts he secured have expired now.

But Wood said if and when financing comes through, the contracts could easily be renewed.

“It is like anything — money talks,” Wood said. “Until the financing is in place, both sides of the table get tired of talking about it.”

Wood admittedly is not actively involved in the project anymore. He is living in Florida and is in a holding pattern as far as Cataloochee Resorts is concerned until he sees positive movement.

“When the financing hit a snag, I backed away and said ‘I’ll just wait until something comes through.’ If it ever goes, I will be running it,” said Wood, who was promised the job of development manager.

Falling out

Lusk didn’t part on quite such amicable terms. He says he was booted off the project a year ago for no reason by Dean Moses, the main player behind the development who lives in Clyde.

Lusk spent two years working for Moses on the promise of a payoff when the project eventually came to fruition — a payoff that never happened and apparently never will, Lusk said. Lusk said he got no salary for his work other than a stipend of $20 a day for food and gas.

“I was to be paid when money came in, but the financing never materialized. No one ever came forward with the money,” Lusk said.

After Moses cut Lusk out of the project, Lusk filed a civil suit in hopes of getting compensated. But this month, Lusk withdrew his claims. He was tired of trying to collect in a case he saw dragging out for a very long time.

It’s not the only lawsuit to surface in connection with Cataloochee Wilderness Resorts.

A Tennessee man claims he was defrauded of $328,000 by Moses and his wife, Colleen. John “Thunder” Thornton of Chattanooga put up the money for down payments on property but the money was diverted to other uses, including the personal gain of Moses and his wife, according to the ongoing suit. Thornton is suing Moses for fraud, conspiracy and breach of contract.

Along with the $328,000 earmarked for land purchases, Thornton loaned another $275,000 to cover operating expenses for the project. The expenditure of those funds are not contested in the lawsuit, however.

Yet another man involved in the project has filed for personal bankruptcy, due in part to debt racked up in connection with Moses. Robert Worthington of Knoxville, who had been Moses’ attorney, co-signed on loans and credits cards on behalf of the Cataloochee development endeavor and Moses, and was held responsible for the debt, according to court filings.

“He listed several debts that were associated with Dean Moses, including loans made to Dean Moses and credit cards used by Dean Moses and his wife,” said Bill Horton, Thornton’s attorney.

Horton said he is not surprised Moses’ project has yet to get off the ground.

“He has a history of going from project to project and raising capital, and then the projects are never completed or they fail or never materialize,” Horton said. “He operates on other people’s capital.”

Moses was the figurehead behind a string of failed business proposals for the closed-down Dayco factory in Waynesville —now the new super Wal-Mart — a saga that spanned several years and eventually ended in bankruptcy court eight years ago.

Moses and his business partners created one company after another with plans to develop the dormant industrial site. They solicited capital from private investors and lending institutions, racking up debts on company credit cards in the meantime.

Files dating back to the Dayco real estate deal in 1999 were among the boxes left behind when the Cataloochee businessmen moved out of their Clyde office. When Moses’ name surfaced as a player behind Cataloochee Wilderness Resorts three years ago, spokespeople downplayed his role in the project as only a consultant. The boxes of Dayco files among the abandoned files suggest otherwise.

Lusk said that the checking account of the Cataloochee development enterprise was controlled entirely by Moses and his wife.

Prior to coming to Haywood County and promoting the Dayco deal, Moses was involved in failed developments in Tennessee.

A Tennessee man claims he was defrauded of $328,000 by the players behind Cataloochee Wilderness Resorts, a planned mega development in Haywood County that is in the preliminary conceptual stages.

Plans for Cataloochee Wilderness Resorts call for a 4,500-acre development in Jonathan Creek. Five years into the project, however, the developers still do not own any land.

They have neither secured financing for the project nor lease agreements from retailers to occupy a massive shopping center. The project remains controversial due to its scale. Locals have expressed skepticism about it ever coming to fruition.

The lawsuit alleges that Dean Moses, a consultant for the project, got an investor to put up money for down payments on land but then diverted the money to other uses, including the personal gain of Moses and his wife, who live in Clyde. It’s not the first time Moses has courted investors for a speculative development in Haywood County. (see “Lawsuit echoes of past business dealings.”)

John Thornton, a developer from Chattanooga, is suing Moses for fraud, conspiracy, and breach of contract for diverting money earmarked for property purchases to other uses.

Thornton was courted by Moses to invest in the project in 2005. He was first introduced to Moses by a Knoxville attorney, Robert Worthington. Worthington was aiding Moses in the pursuit of Cataloochee Resorts and encouraged Thornton to invest in the project. After their introduction, Thornton met with Moses several times in Knoxville to structure the terms of a joint venture agreement.

The two forged a partnership, creating a corporate vehicle to acquire land for the development. Thornton put up $328,000 to be used for down payments on land, stipulating in the joint venture agreement that if the land deals didn’t go through, Thornton would get his money back, according to Thornton’s suit. The money was held in escrow by a title insurance agency, Investors Title.

After putting up the money, Thornton was told in 2005 that the purchase of property was “imminent.”

“Moses continually represented to Thornton that property was being acquired, that loans were being arranged, that contractors were being contacted, that the projects were moving along,” the suit alleges. But nearly a year later, land had still not been purchased.

In June and July of 2006, Moses arranged two separate transfers of Thornton’s money out of escrow and into a new account.

Moses failed to tell Thornton about the transfers, according to the lawsuit. When Thornton learned of the money transfer, Moses refused to tell Thornton how his money had been used, the suit alleges.

Thornton’s money was transferred into an account held by an entity called Cataloochee Companies. The original entity created by Thornton and Moses had been called Cataloochee Corporation.

Thornton claims the creation of a new entity constitutes another violation of the joint venture agreement. To protect his financial stake, Thornton had stipulated that no additional shares could be awarded that would dilute his 50 percent stake in the development, according to the suit. Moses denies agreeing to such a stipulation.

Along with the $328,000 earmarked for land purchases, Thornton loaned another $275,000 to cover operating expenses for the project. The expenditure of those funds are not contested in the lawsuit.

Arms length

Frank Wood, president of Cataloochee Companies, the entity currently pursuing the development, distanced himself from the lawsuit and from Moses.

“We have absolutely nothing to do with that,” Wood said. “I am not a party to it and absolutely don’t care about it.”

Wood said that Moses is “strictly a consultant” on the project.

In his lawsuit, Thornton objects to the characterization of Moses as merely a consultant, as he considers Moses a major player.

Meanwhile, Moses referred to himself as a “manager” of Cataloochee with the “authority to conduct, manage, and control the affairs and business of the company,” according to Moses’s response to the lawsuit. He also described himself as the primary agent for negotiating deals with property owners, arranging leases with retailers, and securing financing.

Wood said that the company Thornton originally invested in is no longer the developer of Cataloochee Resorts.

“That’s an entity that died,” Wood said.

However, Moses’s response to the suit described Cataloochee Companies as the successor to the original entity created by himself and Thornton, Cataloochee Corporation.

Moses responds

In response to the lawsuit, Moses claims that Thornton isn’t entitled to get his money back because the property deals are still pending. Just because the deals haven’t taken place doesn’t mean they fell through; therefore, there is no reason to refund the money.

At one point, Cataloochee developers had property options on just a few tracts. But those have since expired.

Moses claims that Thornton understood the speculative nature of his investment.

“Thornton was aware that Cataloochee owned no real estate and has no assets other than a business plan and the development plan,” Moses’ reply to the lawsuit states. Thornton “was fully aware of the status, nature, and risks associated with the proposed development.”

Further, Moses points out that Thornton’s loans were to be repaid out of excess funds available — of which there aren’t any.

Moses claims he didn’t need Thornton’s permission nor was it necessary to notify him if his money was transferred out of escrow into another account. He states that the funds were used appropriately “to pay debts and obligations of Cataloochee.”

“Moses denies any fraud or deceit in connection with such transfer,” Moses stated in his reply to the suit.

Moses points out the money in escrow was not actually Thornton’s, but belonged to Cataloochee and had merely been placed in escrow to facilitate property deals. Thornton’s original loan was funneled through Cataloochee on its way to escrow, so when it was no longer needed in escrow, it was appropriate to transfer it back to Cataloochee rather than back to Thornton.

Moses has countersued Thornton for breach of contract. Moses alleges Thornton hamstrung the project by failing to put up more money. Thornton also refused to use his personal credit to help guarantee loans or to help raise additional capital, Moses complained.

Moses described Thornton as “unavailable” and “uncooperative” in advancing the project.

“Moses was left with the task of running the day-to-day operations, as well as arranging for and obtaining loan commitments and all other tasks involved in trying to advance the project’s development,” Moses wrote in his countersuit.

Moses also sued Thornton for defamation for a comment made to the Knoxville newspaper about the suit.

Personal gain?

Thornton is also suing Moses’s wife, Colleen. The suit alleges that Colleen withdrew $52,000 of Thornton’s money from the Cataloochee account and deposited it into a personal savings account in her name at a Blue Ridge Savings Bank.

Colleen was listed as a signatory on the Cataloochee account in Knoxville. Thornton discovered that Colleen was writing checks out of the account and depositing them into her personal bank account, thanks to bank records obtained through his lawsuit.

“Substantial other funds were removed from such account for the personal living expenses of Colleen Moses and Dean Moses,” the lawsuit alleges.

Bankruptcy in the midst

Meanwhile, another player in the Cataloochee Wilderness Resorts development has filed for bankruptcy in Knoxville. Robert Worthington, the Knoxville attorney who introduced Thornton to Moses, has accumulated more than $75,000 in credit card debt and a $240,000 bank loan tied to Moses and Cataloochee Companies, according to bankruptcy filings.

Worthington listed more than $75,000 in debt on six credit cards that he claims were jointly used by Moses, who is listed as a co-debtor for the six cards. Worthington is disputing debt on those cards, with a citation in the filing that they were “used by Cataloochee.”

Moses is also listed as a co-debtor on a $240,000 loan from BB&T. Worthington used his name to guarantee the loan for Cataloochee Corporation.

Fraud lawsuit echoes of past business dealings

Does the name Dean Moses, the subject of a financial fraud lawsuit by an investor in Cataloochee Wilderness Resorts, ring a bell?

It should. Moses was the figurehead behind a string of failed business proposals for the closed-down Dayco factory in Waynesville — a saga that spanned several years and eventually ended in bankruptcy court.

Moses and his business partners created one company after another with plans to develop the dormant industrial site. They solicited capital from private investors and lending institutions, racking up debts on company credit cards in the meantime.

When one company hit a financial dead-end, it was dissolved and a new one created.

The third company in the chain actually landed in bankruptcy court. Undeterred, Moses and his partners created yet a fourth company touting an all-too-familiar development plan. They hoped to leave their debt behind in bankruptcy court while walking away with the property intact and trying again under a new entity.

The bankruptcy court balked and instead ended the cycle by foreclosing on the property. The Dayco site eventually became the property of the Haywood Advancement Corporation and is now a shopping center anchored by Super Wal-Mart.

Jimmy and Keith Leatherwood were always glad to see the developers of Cataloochee Wilderness Resorts walk in to their local hangout, the Jonathan Creek Café. It meant free coffee.

The developer would unfurl maps on the table outlining plans for a massive residential and commercial resort spanning 4,500 acres in their rural Haywood community. The maps showed golf courses, a ski resort, lakes, one million square feet of shopping and entertainment, condos, a hotel and hundreds of homes.

“Everybody would gather around because they’d get him to buy them a cup of coffee for listening to him,” Keith said.

“We called him the money man,” Jimmy added.

There was a catch, however. The developers didn’t own a single acre of land.

Jimmy said those who owned land in the path of the development — himself included — were taken aback to see their property penciled in on the plans when no one had ever approached them about purchasing it.

“When they go to moving dirt, I’ll believe it,” Jimmy said.

While the project largely fell off the public radar when the economic crisis hit, the developers say they haven’t gone away.

“People need to know we have not gone away and we are still moving forward,” said Frank Wood, president of Cataloochee Wilderness Resorts, which has an office in Clyde. “We have a lot of work to do yet.”

Wood said the residential phase of the development is on hold pending a rebound of the economy and housing market. But the company is still actively pursuing plans for one million square feet of shopping and entertainment clustered just off Interstate 40 at exit 20.

“The chances of it not happening are pretty slim at this point,” Wood said.

Several pieces have to fall in place simultaneously: financing to buy the land, lease agreements with retailers and property owners willing to sell.

Wood said they are not at liberty to say which retailers are being courted since negotiations are not finalized.

As for financing, Wood said lenders are interested, but he can’t say who.

“They are not ready for us to disclose it until it is all wrapped up with a neat little bow on it,” Wood said. Two pieces of financing are needed — one to buy the land and the other to undertake construction, Wood said.

Property options are still forthcoming as well, Wood said. During their initial foray into the community in 2007, the developers say they secured a few property options here and there but mostly gauged willingness to sell through verbal conversations. The property options they once held have now expired, Wood said.

Mike Sorrells, owner of a service station and convenience store on Jonathan Creek, was among the few who were actually offered signed property options. Sorrells got to keep the money they put down when the option expired.

“They were always aboveboard with me,” Sorrells said. “I understood it may or may not happen.”

Sorrells said the plans were so ambitious that they were likely unrealistic.

“All that was premature, totally out of the box. That was someone’s dream,” Sorrells said. “I think that was a big dream and probably an unrealistic dream. Nobody really believed it.”

Wood disagrees that the grand plan is unrealistic. But he would agree that they went public prematurely.

“This project came into the public light before we were ready for it to come into the public light,” Wood said.

Sorrells believes a retail and commercial development centered around Interstate 40 would be quite viable.

“I think the majority of people would like to see something at that exit one way or another,” Sorrells said.

“Jonathan Creek will grow eventually,” Jimmy Leatherwood agreed. “Whether it is going to be this, I don’t know, but eventually it will grow.”

Cataloochee Wilderness Resort, a 4,500-acre proposed development in Haywood County’s Jonathan Creek community, appears to have fallen off the map.

Developers first announced plans for the massive Resort in November 2007. They touted residential, commercial and retail phases, including golf courses, a ski resort, high-rise hotel and more than 2,000 single-family homes — though the developers never purchased a single parcel of land in the area they planned to develop.

Residents were shocked at the scale of the proposed resort, which would have spanned both sides of a valley from ridgeline to ridgeline. Many also questioned the involvement in the project of Dean Moses, a local businessman who left behind a string of failed business proposals in Haywood County in the past.

Following a big splash a year ago, the alleged developers have fallen silent. So last week, The Smoky Mountain News tracked down Frank Singleton, the former director of public relations for Cataloochee Wilderness Resort, to find out the latest.

Singleton said that the heads of the project told him months ago to stop doing any marketing, advertising, or public relations work for the Resort.

“It’s been about eight months since we stopped doing work for them,” Singleton said. “When the financial meltdown started, they basically said ‘right now, we’re going to have to hold off.’”

Singleton said the project may still be moving along, but at a snail’s pace.

“I think this economy has brought everything to a temporary standstill,” he said. “I think they’re still moving along slowly on some things while they wait for the lending environment to improve.”

Singleton, though, hasn’t spoken with the directors of the Cataloochee Wilderness Resort development “in months.”

The Haywood County planning office also reported that it has yet to receive any plans from the developers of the Resort.

The best news about the proposed Cataloochee Wilderness Resort is that it appears that from here on out, there will be at least some public disclosure on whatever progress is made. At least that is what representatives of the development group are saying, and there’s no doubt that media scrutiny will be very high.

Frank Singleton, the spokesman for the 4,500-acre proposed Cataloochee Wilderness Resort in Haywood County, stopped by The Smoky Mountain News office to answer some questions about the planned development. Singleton said the ball is definitely rolling on the project, with announcements about retail operations set to come in the next few weeks and a public presentation planned for the end of January. He addressed public opposition to the project, the developers’ appearance at a county commissioners meeting on Dec. 17, and the involvement of Dean Moses, a Haywood County businessman notorious for questionable business dealings he made here six years ago.

Rumors have been circulating for years about the proposed mega-development in the Jonathan Creek area, the one with a thousand houses and a huge retail center that would take advantage of the area’s proximity to Interstate 40 and the Great Smoky Mountains National Park. Well, now that those plans are out of the bag, so to speak, the one thing people in the affected area should be reminded of is this: it’s going to take a grassroots effort that pulls out all the stops to prevent a development like this from getting under way.

If all goes as planned, Haywood County will one day be home to a 4,500-acre mega-resort that could drastically change the face of tourism in Western North Carolina — and what it means to call Haywood County home.

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